Customary Pledge of Land in Nigeria

International Journal of Innovative Legal & Political Studies 7(2):25-30, April-June, 2019

Okafor, Samuel Obumneme Esq LLB, BL, LLM, Notary Public Senior Lecturer, Department of Business Law, Faculty of Law, Enugu State University of Science and Technology, Agbani-Enugu State, Nigeria

Aduaka Charles Emenogha Esq LLM, BL, Ph.D Senior Lecturer, Department of International Law & Jurisprudence, Faculty of Law, Enugu State University of Science and Technology, Agbani-Enugu State, Nigeria

ABSTRACT Pledge of land under the native law and custom could easily be mistaken for customary tenancy as the two transactions are very similar but yet highly divergent in many ways. Economics and other domestic needs may lead to a landowner giving out the possession of his land upon a pledge and while he gives out possession, retains title very much in the same way as the overlord under a customary tenancy arrangement. The rules and characteristic of customary pledge were based mainly on the degree of trust which people had in one another in the olden days under the customary setting. Today however, most pledges of land have due to long possession resorted to adverse claims over the pledged land against the pledgors which has resulted to needless and avoidable litigations over conquest for title. The peculiar nature of the customary pledge and the ease with which it could be exploited by the unscrupulous pledgee to attempt to expropriate the pledgor of his interest in the land has brought up the need to examine the nature of customary pledge and appreciate its reassuring peculiar characteristics which have refused to yield to the schemes of the greedy and to give them a leeway to foreclose redemption. Keywords: Customary Pledge, Customary Law, Tenancy, Mortgage and Redemption

INTRODUCTION A pledge is a form of security transaction known to customary law. It is entered into where the owner- occupier of land known as the pledgeor in order to secure an advance of money or money’s worth, gives possession and use of the land to the creditor known as the pledgee until the debt is fully discharged. On the meaning of pledge under customary law, the Court of Appeal in Ahaneku v Iheaturu1 explained that it means promise, vow, agreement, undertaking, security, pawn or guarantee. Explaining the nature of customary pledge in Alloysius Eze Egbe v Ochichi Duru2, the Supreme Court stated thus; Ordinarily, a case of a pledge of land and or its redemption certris peribus (if all things be equal) does not involve an issue of title to the pledged land. By the very nature of such a transaction, the pledge or retains title in himself and the pledge has mere possession. Furthermore, by the very nature of customary pledge, it is perpetually redeemable. The temporary occupation license of the pledgee terminates on redemption. The pledgor retains thereafter both title and possession yielded to him upon redemption. Where however, a pledgee denies the pledge transaction, asserts and claims both title and possession in himself, it is a contest for title.

1 (1995) 2 NWLR pt 380 p 758. 2 (1998) 9 NWLR pt 565 p288.

Okafor &Aduaka..…. Int. J. Innovative Legal & Political Studies 7(2):25-30, 2019

In Polo v Ojor3, the Court of Appeal described a customary pledge as an indigenous mortgage by which the owner occupier of land in order to secure an advantage of money gives possession and use of his land to the pledgee creditor until redemption, that is when possession is re-exchanged for a full discharge of the debt. The possession of a pledge land remains with the pledgee until redemption by the pledgor. From the foregoing description, some essential or characteristic features of a pledge under native law and custom are discernible; 1. That the pledge provides the pledgee creditor with security for the performance of the pledgor’s obligation of repaying the debt. 2. That the security takes the form of giving the pledgee possession of the pledgor’s land or property. 3. It is only possession of the pledged land that is delivered to the pledgee by the pledgor but not together with the title to the land pledged as the pledgor retains title in himself, while the pledgee has mere possession. 4. The customary pledge is perpetually redeemable by the pledgor or his successors-in-title. 5. The possession or temporary occupational license of the pledgee terminates upon the land being redeemed by the pledgor who then resumes possession and retained both possession and title. 6. The pledgee can never deny the title the pledgor or the pledgee transaction but it he does so, it results to a contest for title between the pledgor and the pledgee over the pledged land. 7. A pledge naturally precedes its redemption and thus, if there is no pledge, there can be no redemption and by necessary extrapolation, a redemption presupposes that there was a pledge. Ebevuhe & Ors v Ukpakara & Ors4. 8. There is normally no specific time for the redemption of the pledge. No matter how long a pledge lasts before redemption it can never mature into ownership of the land in favour of the pledgee. 9. The pledge transaction does not and cannot confer on the pledgee the power to sell the pledged land to discharge the pledgor’s obligation to him and if the pledgee does so, such disposition will be void.

Customary Pledge and Mortgage under the English (Received) Law. The customary pledge is sometimes confused with the English mortgage. Elias in Nigerian Land Law 4th Edition pp 153 – 254 described a pledge as a kind of indigenous mortgage. The problem of the confusion is usually further compounded by the practice of reducing customary transactions into writing and failing to use the language that is precise enough to indicate the nature of the transaction. Thus, the controversy over the transaction in the case of Nwabuoku v Ottih5 stemmed from an agreement of loan between two parties whereby the plaintiff gave the defendant possession of his house with rights to collect rents and profits therefrom, but a document was later executed describing the transaction as a mortgage. The confusion naturally arose because the distinction between a customary pledge and the English mortgage transactions is in the nature of the security granted to the creditor under each transaction. If the agreement is intended to give the creditor some proprietary estate or interest in the property then, irrespective of the fact that the creditor takes possession of the property under an express stipulation or by operation of law, the transaction is a mortgage. In the other hand, in a pledge, actual possession of the property is the whole essence of the creditor’s security. It will therefore be proper to describe a pledge as a possessory security while the common law mortgage is a proprietary security. Thus, in Adejei v Dabanka6, the court put the matter thus.

3 (2003) 3 NWLR pt 807 p344. 4 (1996) 7 NWLR pt 460 p254. 5 (1961) All NLR p487. 6 (1930) WACA 63 @ 66-67.

Okafor &Aduaka..…. Int. J. Innovative Legal & Political Studies 7(2):25-30, 2019

It is an essential of a native mortgage (pledge) that possession should be given at the time when transaction takes place between the parties. It is out of the possession granted under the agreement that the pledge’s rights spring. Understandably therefore, the usual arrangement under customary pledge transactions is that the pledgee shall enter upon the pledgor’s land and enjoy the rents and profits from the land until the pledged land is redeemed.

Perpetual Redeemability of a Pledge The nature of customary law pledge is demonstrated by the maxim once a pledgee always a pledgee which is an age long maxim under customary law. - Melifonwu v Egbuji7 - Taiwo v Dosunmu8 - Adegboyega v Igbinosun9 - Ikeanyi v Adighogu10 - Ebvuhe v Ukpakara11 The maxim signifies two basic principles; namely 1. That a thing which is pledged is never lost. So long as it is possible to identify the original purpose or understanding behind the transaction, the land and the parties or their successors to the pledge there is a right to redeem the land not withstanding that many years have elapsed from the date of the transaction. 2. That notwithstanding any stipulation in the agreement for the postponement of the redemption date, the pledgor would be allowed to redeem his property within the stipulated period by tendering the money due for payment under the pledge transaction. This is so notwithstanding that the pledgee had expanded money on improvement or that he has invested money and labour in growing crops yet to be harvested. Adjei v Dabanka12. It is thus obvious that the right of the pledgor to redeem cannot be defeated by lapse of time and may be exercised by the pledgor’s successors in title. This right to redeem is absolute and cannot be fettered by agreement. In Laragun v Funlayo13 a pledged land which enured for 30 years was held to be redeemable. - Amao v Adigun14 - Okoioko v Esedalue15 - Okpowaga v Ewhedoma16 The rule is also that the pledgee is expected to put the pledged land to ordinary use. Thus, a pledgee who plants economic trees or erects permanent structures in the absence of express agreement does so at his own risk or peril. Thus in Okoioko v Esedalue17 Elias CJN (as he then was) put the matter this; “The very nature of a customary pledge which is perpetually redeemable is that the pledgee has only a temporary occupation license and that he must yield up the pledged land as far as possible in the form he took it originally. This means that he must put it to only ordinary use so that its return to the pledgor should be unencumbered in any way. The planting of economic crops like cocoa or rubber can only be undertaken by the pledgee in possession at his own risk, unless of course there is express contract permitting him to do so.

7 (1982) 9 SC 145. 8 (1965) All NLR 399. 9 (1969) All NLR 1. 10 (1957) 2 ENLR 38. 11 Supra. 12 (1930) 1 WACA 63. 13 (1956) WNLR 167. 14 (1957) WNLR 55. 15 (1974) 3 SC 15. 16 (1970) All NLR 203. 17 (1974) 3 SC 15.

Okafor &Aduaka..…. Int. J. Innovative Legal & Political Studies 7(2):25-30, 2019

Where however, the pledged land is already at the time of the pledge planted with economic crops or trees, there may be a presumption in favour of the pledgee to use the land as such until the redemption of the pledge, Okoioko v Esedalue18, but the pledgee is liable to account for any unjustified benefits derived thereby. In Kuahen v Avose19 where there was a pledge of palm trees, the court held that the amount of the produce which was about ₤12 per annum (while the prevailing customary tribute was ₤9 per annum) must be taken into account so that the capital borrowed could be reduced each year by the excess of ₤3 per year. The court regarded as unjust, inequitable and opposed to natural justice, a custom according to which as alleged by the plaintiff, the pledgee was entitled to farm the land and harvest the trees and hold them until the original debt be paid, giving and rendering no account of the value of the produce which in this amounted to more each year than the amount paid as tribute. Also in Amoa v Adigun20; the plaintiff’s claim for an account of rents collected by the defendant pledgee while in possession of the plaintiff’s shop in respect of a loan was granted by the court. The pledgee has no right to any compensation or credit for the economic crops planted by him on the pledged land, neither will he be compensated for improvements carried out on the pledged land. Such plantations where made by the pledgee, accrue to the pledged land on the principle of quicquid plantatur solo, solo cedit. Thus, in Okoiko v Esdalue21 the Supreme Court regarded as an act of grace rather than as a matter of legal right the order by the trail judge in the court below to that pledged be permitted to reap the next harvest before returning the pledged land to the pledgor holding that the law was that the pledgee should quit the land as from the date of the judgment in favour of the pledgor. The pledgee has no power to sell the pledged land to discharge the pledgor’s obligation to him as such disposition will be void. Another point of difference between a customary pledge and a mortgage is that while a pledge has no time limit unless otherwise expressly agreed, a mortgage usually has a stated time to run after which the mortgaged property becomes liable to be foreclosed or sold by the mortgagee. Also, the power of sale available to and exercisable by a mortgagee under the received law is not available to a customary pledgee who continues in possession of the land until eventually redeemed. The legal interest in the mortgaged property passes to and resides in the mortgage whereas the customary pledgee has only possessory right and interest but never title to the pledged land.

Redemption of Pledged Land The law is that where land has been pledged for a loan under native law and custom, the land or property is redeemable by the pledgor or his successor-in-title. If the pledged land is family land, it is redeemable by the family or any member of the family. Generally, under native law and custom the redemption of the land by any member of the family cannot pass ownership of the property to the member that had redeemed the land. However, the native law and custom differs from one community to another and if by the native law and custom of a particular community the redemption of the property will pass ownership to the member of the family that has redeemed the property the court will enforce that native law and custom provided it has been established as such before the court. Among the Aros and the Ndienyi clan where a family land is pledged by the head of the family either alone or in conjunction as appropriate with the principal members of the family, the same is redeemable either by the head of the family and the principal members or otherwise by an individual family member. Where the head of family and the principal members redeem the land, it comes back and belongs to the family as family property which it used to be before the pledge. However, if an individual member of the family employs his personal resources towards the recovery or redemption of the land, the same will belong to him as his personal property provided that before

18 Supra. 19 (1889) Law Report (Colonial Office) cited in Fekumo 275. 20 Supra. 21 (1974) 3 SC 15.

Okafor &Aduaka..…. Int. J. Innovative Legal & Political Studies 7(2):25-30, 2019 proceeding to redeem the land, he informed the family head and obtained his permission either alone or with the principal members of the family. In Ofondu v Onuocha & ors22 it was held that the under native law and custom of the Mbieri people of Imo State, where family land has been pledged for loan and the land is redeemed by any member of the family with the consent of the head of the family, the land or property becomes the property of the member who redeemed it after its redemption. Subject to any local variation to the contrary, a pledge is perpetually redeemable and the pledgor is entitled to redeem the pledge and for the amount of the original loan and nothing more, Okoiko v Esedalue23 which also established the rule that on redemption by the pledgor, the pledgee of the land is not entitled to compensation for putting the land to extra-ordinary economic uses while in possession. Thus, once the transaction is shown to be a pledge of land per se, in return for a loan of money, the land is redeemed however long it may be in the possession of the pledgee. Dung v Challam24, Leragun v Funlayo25. Also, the pledgor’s right to redemption cannot in any way be clogged by the pledge because once a pledge, always a pledge. The pledgee cannot employ such tricks as demanding any amount in excess of the sum for which the land was originally pledged, or by planting the pledged land heavily with economic trees or using other subterfuges to delay, dribble, postpone or attempt to frustrate the right to redeem or other setting up the defences of lapse of time to defeat the pledgor’s right to redeem. In the case of Okoiko & Anor v Esedalue & Anor26 the plaintiffs sued the defendants at the Ugheli High Court, claiming redemption and recovery of possession of their Omokpa land and an injunction to restrain the defendants from possession of the plaintiffs land. The plaintiff’s grandfather had pledged the land to the defendants’ grandfather for three pieces of cloth worth ₤15. The defendants and their ancestors had planted economic crops on the land after taking possession. Several years later, the plaintiff’s family approached the defendants to redeem the land but were asked by the defendants to pay ₤1000, which the plaintiffs refused. On a second approach the plaintiffs were asked to pay ₤600.00 which they still refused and on their third approach to redeem the land, the defendants turned round and claimed that the transaction was a sale to their ancestors but not a pledge. At the trial, the plaintiffs established that the transaction was a pledge under Iyede customary law which does not recognize any sale of land. The defendants offered no evidence in rebuttal and did not even cross – examine the plaintiffs’ witnesses on the point. Judgment was in favour of the plaintiffs and the defendants appealed to the Supreme Court which dismissed the appeal and held inter alia, as follows; 1. That the original transaction was a pledge under Iyede customary law and not a sale. 2. That a pledge is perpetually redeemable and as such the plaintiffs’ family was entitled to redeem the pledged land for the amount of the original loan and for nothing more. 3. That on redemption by the pledgor a pledgee of land is not entitled to compensation for putting the land to extra-ordinary economic use while in possession. 4. That when pledged land is being redeemed by the pledgor or his successor-in-title, the pledgee must account for benefits derived by him from exploitation of the land while in possession; 5. That the pledgee in possession must do nothing to clog the pledgor’s right of redemption of the pledged land, and, 6. That the pledgee always goes into possession and has the right to put the land to some productive use. To that extent, such use is a kind of interest due on the amount to the loan. Quite obvious from the rules is that the right of the pledgor to redeem cannot be hindered by the improvements that the pledgee might have made on the property while in possession; Okoiko v Esedalue27. Lapse of time cannot be raised as a bar to the redemption of a pledged property and, so, the

22 (1964) NMLR 120. 23 Supra. 24 (1992) 1 NWLR pt 220 p738. 25 (1956) WRNLR 167. 26 (1974) All NLR 409. 27 (1974) 3 SC 15.

Okafor &Aduaka..…. Int. J. Innovative Legal & Political Studies 7(2):25-30, 2019 exercise of the right of redemption by the pledgor or his successor-in-title cannot be met with the defence of lapse of time. Leragun v Funlayo28.

Remedy of a Pledgor where the Pledgee Resists Redemption The character of the perpetual redeemability of a customary pledge imports the principle that a pledgee cannot resist the redemption of a pledged land at any time the pledgor is ready to redeem it. Where however, the redemption of a pledge is resisted, the remedy available to a pledgor is an action for redemption and recovery of possession of the pledged land. It cannot be an action for declaration or recovery of title for title had never passed to or inhered in the pledgee under the pledge transaction, see; Polo v Ojor29 , Okoiko v Esedalue30.

CONCLUSION Quite obvious from the rules is that the right of the pledgor to redeem cannot be hindered by the improvements that the pledgee might have made on the property while in possession; Lapse of time cannot be raised as a bar to the redemption of a pledged property and, so, the exercise of the right of redemption by the pledgor or his successor-in-title cannot be met with the defence of lapse of time.

28 (1958) WNLR 167. 29 (2003) 3 NWLR pt 807 p 344. 30 (1974) 3 SC 15 or (1974) All NLR 409.